Correlation Between Sparebank and Hexagon Purus
Can any of the company-specific risk be diversified away by investing in both Sparebank and Hexagon Purus at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sparebank and Hexagon Purus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SMN and Hexagon Purus As, you can compare the effects of market volatilities on Sparebank and Hexagon Purus and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sparebank with a short position of Hexagon Purus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Hexagon Purus.
Diversification Opportunities for Sparebank and Hexagon Purus
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebank and Hexagon is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SMN and Hexagon Purus As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon Purus As and Sparebank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sparebank 1 SMN are associated (or correlated) with Hexagon Purus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon Purus As has no effect on the direction of Sparebank i.e., Sparebank and Hexagon Purus go up and down completely randomly.
Pair Corralation between Sparebank and Hexagon Purus
Assuming the 90 days trading horizon Sparebank 1 SMN is expected to generate 0.22 times more return on investment than Hexagon Purus. However, Sparebank 1 SMN is 4.46 times less risky than Hexagon Purus. It trades about 0.05 of its potential returns per unit of risk. Hexagon Purus As is currently generating about -0.21 per unit of risk. If you would invest 16,236 in Sparebank 1 SMN on September 1, 2024 and sell it today you would earn a total of 174.00 from holding Sparebank 1 SMN or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SMN vs. Hexagon Purus As
Performance |
| Timeline |
| Sparebank 1 SMN |
| Hexagon Purus As |
Sparebank and Hexagon Purus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Hexagon Purus
The main advantage of trading using opposite Sparebank and Hexagon Purus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Hexagon Purus can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hexagon Purus will offset losses from the drop in Hexagon Purus' long position.| Sparebank vs. Sparebank 1 Nord Norge | Sparebank vs. Sparebanken Vest | Sparebank vs. Storebrand ASA | Sparebank vs. DnB ASA |
| Hexagon Purus vs. Scana ASA | Hexagon Purus vs. Elkem ASA | Hexagon Purus vs. Integrated Wind Solutions | Hexagon Purus vs. Vow ASA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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